Mutual Funds - Essay Example

Comments (0) Cite this document
One important concept which always has been spoken when people talk about the finance and financial details is the concept of mutual fund. Before really moving into the discussion about mutual funds, we will bring the basic definition of other related but important concepts of stocks and bonds…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.2% of users find it useful
Mutual Funds
Read TextPreview

Extract of sample "Mutual Funds"

Download file to see previous pages similarly we can outline the concept of bonds. Bonds gives people chance to lend our money to the government or a company. We receive interest and principle back over pre-determined amount of time. We can say that bonds are the most common lending investments traded on the market. Other than shares and bonds there are other types of investments like real estate and precious metals but it is generally perceived that mutual funds mostly invest in stocks and bonds.
Many definitions have written by people but essentially all dwell upon the same idea regarding its concept. So a mutual fund can be defined as a financial intermediary that allows a certain group of investors to pool their money together with a pre-determined investment objective. Here in mutual fund there exists a fund manager who trades the fund's underlying securities. He then can realize capital gains or loss and then collects the dividend. Whenever we invest in a mutual fund, we are buying shares of the mutual fund and thus in the process becoming a shareholder of the fund. After the dividend income is found, the investment proceeds are then passed to the individual investors. We then calculate the value of the share of the mutual fund which is known as net asset value. ...
ies we can say that it is one of three types of investment companies in the United States and outside United States & Canada mutual fund can termed as generic word for various types of collective investments.
Types of Mutual Funds
There exist few common types of mutual funds and they are outlined as follows: Money Market funds, fixed income funds, equity funds or growth funds, balanced funds, global funds, specialty funds and index funds. Lets describe each of them briefly so as the understand the whole concept clearly.
Monet Market Funds:
These are generally perceived as low risk funds offering low returns. These are a type of mutual funds that invest in a short term debt securities of agencies like banks U.S Treasury bills. They have advantages of being widely used, low risk and highly liquid in nature.
Fixed income funds
It is a type of mutual funds which invest in debt securities like bonds and mortgages. The main goal is to provide the investors with regular income with low risk. Here in this type fund values fluctuate in response to changes in interest rates
Equity Funds
Equity funds are also called as growth funds. It invests primarily in common shares. The goal is to have long term growth because the value of the assets held usually increase over time. Some funds focus on blue chip companies and others on smaller companies.
Balanced Funds
It invests in a balanced portfolio of equities, debt securities with the goal of providing reasonable returns with low to moderate risk
Global and foreign funds
It is a type of mutual fund which may be fixed income or growth or balanced funds and which invest in foreign securities.
Specialty funds
It is a type of mutual fund which invests primarily in a specific geographic location or a specific ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Mutual Funds Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
Mutual Funds Essay Example | Topics and Well Written Essays - 2000 words. Retrieved from
(Mutual Funds Essay Example | Topics and Well Written Essays - 2000 Words)
Mutual Funds Essay Example | Topics and Well Written Essays - 2000 Words.
“Mutual Funds Essay Example | Topics and Well Written Essays - 2000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document


Do Socially-Responsible Mutual Funds Perform Better Than Conventional Mutual Funds

...? Do Socially-Responsible Mutual Funds Perform Better Than Conventional Mutual Funds? Introduction Mutual funds are d to be an investment fund of different kind. Investment fund refers to the assortment of investments for instance bonds, stocks or other kind of funds. Mutual funds are significantly different from most of the different kinds of available funds. Mutual funds are described as ‘open-ended’ implying that as the number of people investing in the funds increases, the...
11 Pages(2750 words)Research Paper


... Introduction A “mutual fund” is a scheme for investment which is professionally run by pooling money from many investors to buy securities. The mutual funds firm management undertakes market analysis that enables the fund to make a decision on asset allocation to invest depending on the expected return and risk of the assets. The decision that the managers of the firms take has in the past raised questions on how their analysis are able to beat the market consistently. To out perform the market returns, the manager is expected to demonstrate the ability to make correct market timing and market selection. Market selection is when the manager is able to select among the assets traded in the market the lowly priced asset and sell... it at a...
10 Pages(2500 words)Dissertation

Performance of mutual funds in Saudi

...?CONCLUSION All in all we see how this study effectively evaluates the performance of mutual funds in Saudi Market. We see how the crucial gap in theSaudi mutual fund market is filled through the effective comparison of the mutual funds on basis of their performance which in effect leads to a clear distinction between superior and inferior performing funds for the benefit of investors and fund managers. The work of Jensen (1967), Carhart (1997), Wermers (2000) and Sharpe (1994) aims to do just that. The methodologies of three well-regarded industry surveys: Morningstar, Standard & Poor’s and Value Line...
1 Pages(250 words)Essay

Mutual Funds

...? Mutual Funds Introduction With the increasing risk of the financial markets brought on by the American recession and the European Sovereign Debt Crisis investors have increasingly looked to safe havens for their money. One of the most prominent and conservative means of investment diversification has been the mutual fund. Mutual funds are securities that are registered with the Securities and Exchange Commission (SEC). Broadly speaking, they are composed of stocks, bonds, short-term money market instruments, and other securities that function as a means of hedging against possible declines in a security or investment sector. The main...
5 Pages(1250 words)Essay

Do Socially-Responsible Mutual Funds Perform better than Conventional Mutual Funds

...?Do socially responsible mutual funds perform better than conventional mutual funds? Do socially responsible mutual funds perform better than conventional mutual funds? Introduction For many years, socially responsible investment also known as ethical investment has grown tremendously all over the world. Socially responsible investment is a process that incorporates ethical, social, and environmental considerations into investment decision-making criteria. Unlike the conventional investment, socially responsible investment funds apply a set of investment checks or screens to exclude or...
8 Pages(2000 words)Research Paper

Money Market Mutual Funds

...Money Market Mutual Funds Money market mutual funds, also referred to as money market funds, are investment companies, which have open-end policies that only invest in money markets (Thomas 208). The investment is short-term and involves debt securities in form of commercial paper, United States Treasury bills, liquid assets, and certificates of deposits. Money market mutual funds aim at limiting losses incurred because of market, liquidity, and credit risks. They preserve the principal in the investment and bring in modest dividends. Though there is fluctuation in the interest rates, the Net Asset Value of the...
5 Pages(1250 words)Essay

Finance Investor constraints and mutual funds

...YOUR FULL YOUR Choosing the Right Fund Mr. B is a widowed, sixty-nine year old retired machinist. His primary source of income is his social security check and interest earned on the $ 200,000.00 he has saved over his lifetime; which is currently in a savings account at his local bank. He is looking for a good investment that will provide him with safety of principle (low-risk), a reasonable monthly income to supplement his government benefits (high-yield), and still have some money left to leave to his nephew when he dies. Accordingly, we will recommend a no-load, low-expense mutual fund as Mr. B. is not a sophisticated man who would be able to understand the intricacies of creating...
2 Pages(500 words)Essay

Mutual Funds Articles

...When a Fund Loses Its Star By Aaron Pressman The article “When a Fund Loses Its Star” written by Aaron Pressman highlights the fact that one of the major problems that the finance industry is facing today is that most of the fund managers are nearing their retirement age and it is expected to double in the next ten years or so. With due respect to the skills of the incoming managers, still the funds which are already in transition suffers from some common problems-Hedge funds and other traders try to guess what positions might be sold. Sometimes investors in a fund jump ship en masse, forcing ill-timed asset sales. In many cases, it is...
6 Pages(1500 words)Essay

Investing In mutual funds

...Mutual Fund Investment The current global economic recession has created lot of concerns among investors about the safety of their investments. Some of the trusted traditional financial institutions like banks have collapsed and hence the investor’s belief in banks has been reduced considerably. On the other hand the share market and mutual funds were also adversely affected by the current recession. Many people have lost huge amounts of money because of the problems mutual fund and share market investments. This paper focuses on investments in general and mutual fund investments in particular....
2 Pages(500 words)Essay

Analysis of Saudi Mutual Funds Regression Results

...Interpretation of Results of Regression Analysis A total of 38,589 observations were made on 217 Saudi mutual funds. Out of these, the minimum number of observations per group was 11 while the most number of observations were 219. These figures led to an average of 178 observations. The correlation coefficient r-squared of 0.2043 indicates that 20.43% of the total weekly returns can be accounted for by the benchmarks involved in the study. Among the twelve benchmarks used for the performance evaluation exercise, results from the regression analysis conducted indicate that eight are statistically significant predictors of weekly returns generated by Saudi mutual funds....
3 Pages(750 words)Speech or Presentation
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Mutual Funds for FREE!

Contact Us